Greece's hopes of averting default dimmed on Saturday as fears grew the country may have missed fiscal targets set by its lenders while euro zone policymakers bickered on how to respond to the deepening crisis.

The country's finance minister denied a report in German weekly magazine Spiegel that international inspectors will report that Greece failed on all its fiscal targets, a condition for getting a key, fifth tranche of a 110 billion euro bailout.

"Negotiations continue and will be completed in the next few days. We have every reason to believe the report will be positive for the country," George Papaconstantinou told Greek Mega TV.

But pressure continued to pile on the socialist government, which saw its popularity fall behind its conservative opposition for the first time since 2009 elections in the wake of harsh austerity measures to exit the debt crisis.

Echoing earlier views from the IMF, ECB board member Juergen Stark said Greece's privatisation programme could raise six times more than the 50 billion euros planned.

"The Greek government has shares in listed companies, it owns real estate. Experts estimate the sales potential (from privatisations) at up to 300 billion euros," Stark told German newspaper Welt am Sonntag.

The ailing euro zone state, whose debt burden stands at around 330 billion euros, needs to secure support from opposition parties for fiscal reforms before the European Union and International Monetary Fund will free up more cash to plug funding gaps in the next two years.

EU officials have asked Athens to step up privatisations urgently and suggested setting up a trustee institution to help oversee the process, similar to the body that privatised East German companies after the fall of communism.

But the EU has not asked to play a major role in the asset sales and is only offering its expertise, Papaconstantinou said on Saturday.

The IMF's European department director, Antonio Borges, said earlier this month the 50 billion euros cited as a figure for proceeds represented "probably less than 20 percent of all the assets the Greeks could privatise."

The head of Germany's economic advisors said on Saturday a Greek debt restructuring may be necessary and, if so, he would favour a haircut—or valuation discount—on Greek bonds.

"Possibly, a debt restructuring would be necessary and in this case I am in favour of a haircut," the chairman of the 5-member panel of 'wise men' advising the German government told the Greek Real newspaper.

A eurogroup working committee has been tasked to research how a 'soft' Greek debt reprofiling might work and whether it is possible to have one without triggering a credit event, Dutch Finance Minister Jan Kees De Jager said on Saturday.

European Commission President Jose Manuel Barroso also weighed in on Saturday, telling Greece the only way it can exit its debt crisis is through fiscal consolidation and by improving competitiveness.

"If there was an easier way out of the crisis, we would have chosen it," Barroso said in an article in Kathimerini newspaper. "But there isn't."

Greek Prime Minister George Papandreou said there was still common ground with opposition parties on austerity policies after failing on Friday to broker a consensus for the government's austerity programme and reforms.

"I believe there are several points we converge on," he told reporters, a day after opposition parties rejected his call for backing. "I will not stop seeking consensus. I hope several political forces respond so that we help ourselves exit this crisis in a faster and stronger way."

The opposition has rejected proposed tax increases to help reduce the budget deficit, arguing instead for tax cuts to revive economic growth.

( Source: Reuters )